Tuesday, February 22, 2022

March 2022 Dividend Stock Watch List

As I'm writing this blog post, we're a couple of weeks into February. It's hard to believe that we're already over six weeks into 2022.

With that aside, I'm going to discuss a few dividend stocks that I'll be watching in the weeks ahead.

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Dividend Stock #1: U.S. Bancorp (USB)

The first stock that I'm considering purchasing next month is the regional bank U.S. Bancorp. There are a few reasons why USB is on my watch list, which I discussed in a recent Motley Fool article.

First, USB is trading at a current year P/E ratio of 13.5. This is a rational valuation in my opinion. USB's price to tangible book value of 2.5 is also moderately lower than its 13-year median of 3.1, which is despite the fact that its fundamentals are arguably as strong as ever.

Second, USB's earnings are going to be propelled higher by interest rate hikes (i.e., higher net interest income) and growth in its payments business. That's why analysts are forecasting 10% annual earnings growth over the next five years.

Third, USB offers a 3.1% dividend yield at its current $59 share price (as of February 15, 2022). This is well above the S&P 500's 1.4% dividend yield, but USB paid out only just over a third of its earnings last year.

Dividend Stock #2: Air Products & Chemicals (APD)

The second stock that I am thinking about buying in March is the industrial gases stock Air Products & Chemicals (APD). As I explained in a Motley Fool article, there are several reasons that I'm looking at APD right now.

APD has raised its dividend for 40 consecutive years. You'd think that with four decades of dividend increases, APD's dividend growth would significantly decelerate by now. But the most recent 8% raise isn't that far below the 10% clip since 2014

APD's earnings are expected to compound at 11% each year over the next five years, which should power at least high-single-digit dividend increases in the medium-term as well. For a 2.6% dividend yield, this is an attractive level of dividend growth potential.

And with a P/E ratio of 24 for this year at the present $248 share price (as of February 15, 2022), APD is fairly priced in my opinion for its quality and growth prospects.

Dividend Stock #3: NextEra Energy (NEE)

The third and final stock that I'm contemplating purchasing next month is NextEra Energy (NEE). Those looking for more in-depth reasoning for why I like NEE can check out the same article that I linked in the APD section above, but here are the basic reasons. 

Like APD, NEE is a Dividend Aristocrat. NEE has 26 years of dividend growth on its resume, which looks primed to continue. That's because analysts anticipate NEE's earnings will grow 9% annually through the next five years.

This should also allow for high-single-digit annual dividend growth, which is enticing when paired with NEE's 2% dividend yield

NEE at $75 a share trades at a P/E ratio just under 27, which isn't an unreasonably high valuation for a stock of its quality.

Concluding Thoughts:

Going into March, I expect that I'll be able to put $2,600 in capital to work (including reinvested dividends). Based on the stocks on my watch list, I'll probably be able to add somewhere in the ballpark of $75 to my net annual forward dividends from fresh capital and dividend reinvestment alone. That's not even counting the fact that I'm expecting 6 dividend increases next month, which will add even more to my net annual forward dividend income.

All in all, I'm pleased with the direction the portfolio is heading and excited to keep building it up.


Are any of USB, APD, or NEE on your watch list for March?

If not, what stocks are you considering buying?

As usual, thanks for reading and I look forward to your comments in the section below!


  1. I like the APD pick from your list. One of my oldest holdings and is looking attractive at current levels. Thanks for sharing.

  2. My pleasure. APD is a great dividend growth stock, especially with the dividend yield just above 2.7% now. Thanks for the comment.

  3. I've owned APD since 2013 and I've been very happy with results. Looking to increase my stake there too, but will probably take more of a DCA approach to building it.

  4. Thanks for the comment and congrats on owning APD for nearly a decade.